How Do I File for Bankruptcy?
Bankruptcy can be a tough pill to swallow, especially if you have historically always paid your bills and have been a responsible consumer. However, this law was put into place for your protection, and you must understand that sometimes bad things happen to good people. Bankruptcy is not a moral or ethical decision, it is a financial decision. If you are wondering, “Can I file bankruptcy?” it must be kept in that perspective. There is no shame in filing bankruptcy. It is merely a tool that will allow you to survive.
The creditors and credit card companies don’t care about you; their only concern is money, even if you have been a customer for years. Below we have outlined the basic process of filing bankruptcy as well as some important information for you to consider if you are considering bankruptcy. This information is not meant to take the place of legal counsel. Please contact our office to make a confidential appointment with a lawyer or for more information.
Step #1 Get a Lawyer
As a consumer, you should research your options regarding how to file bankruptcy. The first step is to contact a lawyer and set up a consultation. Retain a lawyer that you feel comfortable discussing your situation with and one that has the necessary experience support staff. Be certain that the lawyer you hire is competent to handle your case. This is someone that you are going to work closely with over the next few months or the next few years in a Chapter 13 Bankruptcy. You want someone with whom you are at ease. If you can’t afford a lawyer right now, save and wait until you can. It will be well worth it.
Bankruptcy Procedure is complex and often counter-intuitive. Lawyers spend years in school and then years practicing before fully understanding bankruptcy procedure and how to file bankruptcy. A non-lawyer is not going to be able to understand the bankruptcy procedure, even at a basic level, without making a massive time commitment to learning how a bankruptcy works.
Can I File Bankruptcy?
A series of simple questions will determine if you are eligible to file Bankruptcy and under which Chapter you should file. Generally, these questions relate to your assets, liabilities, income and expenses. Recent transfer of property and other financial qualifications also affect what Chapter of bankruptcy to file and the bankruptcy procedure.
An attorney from our office will have a no charge consultation with you to explain your options and which chapter of bankruptcy, if any, would be best for you. After the consultation you should go home and discuss your options with your immediate family. We recommend that you take a day or two to consider your options. When you have made the decision to file you can contact our office for a second appointment with our experienced bankruptcy attorney. We will then initiate the Bankruptcy process.
Step #2 Pre-Filing Credit Counseling
Under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), which substantially amended the U.S. Bankruptcy Code effective October 17, 2005, prior to filing a bankruptcy case, you must obtain consumer credit counseling from an entity approved by the U.S. Trustee within 180 days of the date of the filing of a bankruptcy case.
This counseling requirement is an opportunity for consumers filing bankruptcy to have a chance to obtain an opinion from another source to help determine if you should file for bankruptcy protection. You can complete this counseling over the phone or online. Our office has negotiated a $15 fee for this counseling which includes your spouse if you are filing a joint bankruptcy.
Step #3 Filing Bankruptcy
Once you have retained an attorney or you have signed your bankruptcy petition, you should refer all creditors to your bankruptcy lawyer’s office. Your bankruptcy lawyer’s office will then be able to speak on your behalf (which means no more annoying calls). Once your bankruptcy lawyer has filed your case, the “automatic stay” goes into effect. This means that NO creditor can legally contact you about your debt.
Once your attorney has submitted your bankruptcy petition, you will be notified by mail of the date for your “meeting of creditors” (or a “341 meeting”, named after the section of the Bankruptcy Code requiring it). This is a meeting with the trustee assigned to your case where he or she has an opportunity to ask you questions about your bankruptcy case. Your attorney will accompany you to this hearing. Very seldom do creditors appear at this meeting. Note that it is required that you have a state issued photo id and a document with your social security number on it.
Step #4 Post-Filing Credit Counseling
After your attorney files your bankruptcy you will need to get post-filing credit counseling, also referred to as debtor education. Again, you can do this easily online for a small fee. You will need to provide proof of this counseling, usually in the form of a printed certificate upon completing the credit-counseling course.
Step #5 The Meeting with the Trustee or “Meeting of Creditors”
This meeting allows the trustee to ensure that you have given truthful answers on your bankruptcy petition and that you understand and agree to filing for bankruptcy. Your creditors may also ask questions of you at this meeting, but it is rare that creditors actually show up. You MUST provide a photo ID and proof of your Social Security Number.
Your lawyer will attend the meeting of creditors with you to ensure everything goes smoothly. Prior to the meeting, you should have reviewed your bankruptcy petition so that you are familiar with what’s listed and you understand the bankruptcy procedure. Once you are sworn in at the meeting, you will answer questions that are recorded. The meeting goes very quickly in most cases and can last under 3 -5 minutes.
Step #6 Discharge From Your Debts
The final step in your bankruptcy is to receive a legal discharge from your debts. A discharge means that you have no further obligation to repay the discharged debt and that your creditors can never collect the debt from you. If you filed a Chapter 7 Bankruptcy you will receive your discharge approximately 90 days after you file. If you filed Chapter 13 Bankruptcy, you will receive the notice of discharge approximately 3 to 8 months after your final payment has been made on your Chapter 13 Bankruptcy plan.
Not all debts are discharged in a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy case. Non-dischargeable debt can include student loans, certain taxes or government debt, and alimony and child support, among other things. Whether or not a debt is discharged depends on certain Bankruptcy Code provisions and bankruptcy procedure. It usually takes four to six months after filing for bankruptcy to receive this discharge. At this point you have reached your fresh start!
Important Pre-Filing Information
If you are thinking about filing a bankruptcy case, it is best to have not used your credit cards within the months leading up to the filing of your case. If you do so with the intent to file bankruptcy (not having the intent to repay at the time you charged), a creditor can challenge the discharge of the debt charged prior to the bankruptcy or even your right to discharge any debt.
If you obtained the debt knowing that you could not repay it, you may not be able to discharge that debt if the creditor challenges it through a lawsuit, or adversary proceeding, in your bankruptcy case. A bankruptcy lawyer can give you legal advice on such issues.
Please contact our office to make a confidential appointment with a lawyer or for more information.